Politicians complain about fiscal oversight of Rahway Valley Sewerage Authority and its budget

RAHWAY -- The Rahway Valley Sewerage Authority passed its 2010 budget last week, despite angry protests from mayors and city officials from Woodbridge, Rahway and Clark who complained of waste and had sought more oversight of the utility’s finances.

The authority, a non-profit agency that has processed sewage since 1928, serves 14 communities and 300,000 residents in Union and Middlesex counties. The agency approved a total budget of $32.4 million. But much of the conversation at Thursday night’s meeting of commissioners centered on its budgeted operating expenses of $14.6 million, which rose by more than $1 million from the money the authority actually spent in the last year.

Mayor Sal Bonaccorso of Clark complained about the costs of a court-ordered improvement project that rose from a projected $70 million to about $250 million. The project, which includes a cogeneration plant that would use methane from the facility to make electricity, has been held up for years by faulty equipment.

Westfield commissioner Allen Chin said costs were driven up because it was built at the peak of a boom, when costs for steel and concrete hit highs due to demand from China.

But local politicians weren’t satisfied with the explanation.

“Things get way out of control on every construction project,” said Rahway councilwoman Jennifer Wenson-Maier. “But that contingency is usually 10 percent, not 300 percent.”

Local politicians protested chronic surpluses that they called exorbitant.

“The appropriations that are so different than the amount expended should be worked out,” said Peter Pelissier, Rahway’s business administrator and a former commissioner. “It seems that every couple years we have to come back and say, ‘Gee, where is this money going?’”

Authority treasurer Robert Materna said the authority keeps a reserve of 25 percent of its operating budget for emergency expenses, like a damaged sewer line that required a $1.4 million repair last year.

Materna also said that with no surplus, the authority’s budget would attract negative attention from credit ratings agencies like Moody’s, which could downgrade the authority’s bonds.

The surplus issue was sensitive for officials with municipalities hamstrung by tight budgets.
Mayor John McCormac of Woodbridge said he had no surplus at all.

Pelissier said Rahway needed its share of the authority’s surplus, which amounts to hundreds of thousands of dollars.

He had reason to be sensitive to the issue-earlier this year, Moody’s downgraded Rahway’s bond rating in October for the second time in recent years due to a shrinking surplus.

Other municipalities had graver fiscal concerns than bond ratings.

“We are here because the people in our municipalities are broke,” said Bonaccorso of Clark, which sued the authority over its bills this year. “I’m a landscape contractor by trade. I go home every day saying, ‘Please, phone, ring.’”